Get started on the path early, choose wisely, and your real estate investments can pay off big down the road.
While it’s never too late to start investing in real estate for the future, jumping into the mix sooner is better than later. Do the math—if you begin investing at a young age, you’ll have more years to accrue monthly cash flow and see long-term property appreciation.
Another great advantage to getting started early relates to lifestyles of many 20-somethings. Mark Ferguson pinpoints this benefit in an article for Money Under 30: “When you are young, you have more flexibility in life, less commitments, and can take more risk. If you take too long to start investing, family, work and life make it hard to learn about and buy rental properties.”
Put Your Money to Work in Real Estate Investing
For those who are willing to diversify their savings, property investment could be a smart alternative to a low-earning savings account.
SmartAssets’s Rebecca Lake, in an article for Business Insider, notes how young investors are often reluctant to invest in a sometimes-volatile stock market. Drawing the comparison to property investment, she states, “Real estate, on the other hand, offers an added layer of insulation against bumps in the market. The recent housing collapse aside, real estate tends to remain stable even when stocks tumble.”
Don’t Have a Lot Saved for a Big Down Payment? No Sweat.
One of the most appealing parts of being a young real estate investor is that you can get started without putting in a large sum of money. While down payments on a property are typically 20% of a home’s value, a young investor might qualify for a first-time home buyer loan.
FHA loans, for example, allows you to put down just 3.5% of the purchase price. And those who qualify for a USDA or VA loan, may not have to make a down payment at all.
Crowdfunding for real estate is another possible route to take, allowing budding investors to get started with as little as $100. As Ms. Lake notes “The SEC recently finalized Title III of the JOBS Act, making it possible for anyone to invest through crowdfunding platforms, regardless of their net worth. That’s a plus if you’re in your 20s and you haven’t built up a sizable amount of wealth yet.”
Dial Up Your Cash Flow Immediately and Boost Your Take-Home Pay
Got student loans to pay off? An upcoming adventure to finance? Or an eye on your next investment property? One of the most attractive benefits of investing in real estate is the positive effect it can have on your bank account. Collecting rent from a rental property, for example, is akin to having a part-time job (or two!), but without actually putting in the hours. Or, if you choose to live in your property, you can simultaneously improve with the intention of turning a profit when you sell.
Anum Yoon of Financial Avenue offers his perspective on 20-something property investors as follows: “Investing in real estate while you’re young will carry benefits that can last a lifetime. Do your homework, be aggressive and open your eyes. This will be a fun and rewarding path.”
Like any other investment, real estate comes with risks. Awareness of what they are is the key to mitigating them—and HomeUnion® is an invaluable resource in this endeavor. From start to finish, we are here to lend you a hand and can help you do your research on the market and the property itself to help ensure your success. Schedule a consultation with HomeUnion® to get started.